funding community projects at scale

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funding community projects at scale Will Dawson, Principal Sustainability Advisor, Forum for the Future

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funding community projects at scale. Will Dawson, Principal Sustainability Advisor, Forum for the Future. Overview. Who are Forum? Our approach to energy Our energy work Community energy funding at scale Local authority funding at scale Sources of funding Energy Services Frontline - PowerPoint PPT Presentation

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Page 1: funding community projects at scale

funding community projects at scaleWill Dawson, Principal Sustainability Advisor, Forum for the Future

Page 2: funding community projects at scale

Overview

• Who are Forum?• Our approach to energy• Our energy work• Community energy funding at scale• Local authority funding at scale• Sources of funding• Energy Services Frontline• Take homes

Page 3: funding community projects at scale

Forum for the Future

Forum for the Future is a non-profit organisation working globally with business, communities and government to create a sustainable future.

 We aim to transform the critical systems that we

all depend on, such as food, energy and finance, to make them fit for the challenges of the 21st century.

 We have 15 years’ experience inspiring new

thinking, building creative partnerships and developing practical innovations to change our world.

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UK Investment required by 2020

From: Transform UK: Mobilising Investment for a clean energy future www.transformUK.org

Page 10: funding community projects at scale

Some of our energy projects at the Forum

Gatecrashing the energy sector

Page 11: funding community projects at scale

Climate finance initiative

SEEDA - Low Carbon West Oxford- Ovesco- Eastleigh Borough Council

West Sussex- Low carbon building refurbs

- Schools- Own estate- Behaviour change

Page 12: funding community projects at scale

Feed-in tariff financing in action

Low Carbon West Oxford

•Local share issue•£1 million raised for renewables•500kW renewables capacity•VFM: c.12x C reduction from PV•90 out of 1600 households•Scaling up to city then county

Page 13: funding community projects at scale

Case study: Birmingham Energy Savers• funded by Birmingham Council, energy

suppliers and commercial banks, initially £100 million

• 15,000 houses first, disadvantaged areas• Renewables and energy efficiency • Refinance: £2 billion for the next 200,000

homes• 500 new jobs per 10,000 homes refurbished• Part of ‘60% by 2026’ City target

Page 14: funding community projects at scale

Community Energy Co: Renewables and retrofits

Community Energy Co: Renewables and retrofits

HouseholdsBusinessesOrganisations

Community benefit projects

Low carbon communities modelKey

Flow of money

Support provision and information

Energy and retrofit

Investors Community Fund

Projects

at least £1 billion to unlock to next5 years

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If the returns are there, why’s the big money hiding?

1. Most projects are too small to get the banks out of bed

2. Pension funds don’t understand the opportunity – flight to known risks

3. Each project on its own is too risky

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Steps to scaling up community energyStep Examples

1. Create aggregation funds FSE Community Generation Fund

2. Use local authority borrowing power

Birmingham Energy Savers

3. Guarantee fund for project losses

Radian/GESB Revolving Retrofit Guarantee Fund trial

4. Unlock new investors Energy4all, OVESCo share issues; UK Carbon Reporting Framework; FSE

5. Support and information provision to the whole system to grow project sizes

Elements: Local Unitied, LDA, Radian, Community Central, Energyshare / British Gas, Forum for the Future, Transition, FoE

6. Higher FiTs and RHIs for community projects

We and others are working on it!

7. Standardisation of project documentation to reduce due diligence costs and hassle

We are looking at this with a number of financing institutions

Page 17: funding community projects at scale

Sources of capital funding

Established

•Banks•Local authority•Local people•Corporates (e.g. British Gas and energyshare.com)

Possible in the future

•Regional revolving funds, e.g. Finance South East Community Generation Fund•Green Investment Bank

Page 18: funding community projects at scale

Energy services

Problem: risks and rewards divide interests of energy suppliers, engineers and users

Current Solution: energy performance contract / service company

NHS Trust and Honeywell

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London’s RE:FIT leadership

- Framework Agreement to carry out works in the UK public sector

- Buyer guidance and toolkits- 42 buildings so far – Fire, Police and TfL:

- £7m investment, - £1m p.a. savings, 7-year payback- 28% energy saving average

- 58 buildings in Tranche 2- £70m London Green Fund for financing - ~ 3,000 buildings (40% of estate) in Tranche 3

Page 20: funding community projects at scale

Sources of capital investment

Established• Capital reserves• Public Works Loan Board• Banks• Regional Growth Fund• European Regional Growth fund• London Green Fund

Possible in the future• Regional revolving funds, e.g. Finance South East

Community Generation Fund• Local investors• Green Investment Bank

Page 21: funding community projects at scale

Energy Services Frontline

1. Carbon: At least 35% savings

2. Frontline: reallocate savings to services

3. Whole community: involving building users, sharing savings with community

4. Scaling up: pilots to mainstream, e.g. role of Green Investment Bank, HM Treasury accountancy rules

Page 22: funding community projects at scale

Recap of financing models covered

Aggregation via intermediate funds: small is beautiful and together can be large

Community share issues: achieve much more with community ownership

Local authority borrowing : for communities and for own estate

Service contracts: pure pay out of savings Wholesale refinance: role for Green Investment

Bank Risk pooling: e.g. Finance South East Self financing: from own balance sheets

Page 23: funding community projects at scale

http://www.forumforthefuture.org/[email protected]

Forum projects and publications